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Real estate in Dubai and other UAE countries has been immensely popular with foreign investors in the past year. In addition to the opportunity to earn money by renting or reselling real estate when prices rise, foreigners can get a simplified residence permit when buying apartments or villas in Dubai for $204,000. Will it be available for Russians to buy housing in the UAE in 2024 and what properties should be paid attention to? We will answer these questions later in the article.
Content:
- Demand for real estate in Dubai and other emirates
- Types of real estate in the United Arab Emirates
- What property to buy in the UAE in 2024?
Demand for real estate in Dubai and other emirates
Since 2021, there’s been an increase in demand for housing in Dubai and the UAE from foreigners. However, in 2022, there was a record increase in demand from CIS citizens, primarily Russians. For the 1st quarter of 2022, real estate sales in the UAE to Russians increased by 67% compared to the same period in 2021. This investment by citizens is not only due to the prospect of obtaining a residence permit. The priority for the citizens of the Russian Federation became the opportunity to invest, which is now easily feasible in the East, than in Europe or the United States.
The most popular were the prestigious villas and luxury apartments in Dubai, the largest and most developed metropolis of the UAE. Since early 2022, the city's Land Department has recorded 75% more real estate transactions in Dubai than last year. Business relocation opportunities, a loyal tax policy for visiting investors and companies and a simplified visa regime are the factors that have caused an increase in demand.
In October 2022, the average cost of 1 square metre in off-plan flats in the emirate was approx. $5,000. Compared to October 2021, the average increase in apartment prices in Dubai was about 10%. In the luxury real estate segment, this figure exceeded 20%.
Types of real estate in the United Arab Emirates
Local developers offer buyers both luxury penthouses and private villas, as well as flats and apartments.
Flats and apartments in new buildings are in the highest demand amongst Russia investors. This is due to lower initial costs than villas or townhouses, as well as the fact that these types of housing are easier to rent out. In addition, choosing an apartment, compared to a detached house, allows its owner to significantly save on the cost of utilities, which can be quite high every month.
However, luxury housing consisting of villas, penthouses, and duplexes is also in great demand amongst foreign buyers. This is not surprising, as in 2022, Dubai noted an increase in the influx of super-rich investors. Experts are confident that this trend will continue and that, by 2030, Dubai will enter the top 20, and possibly the top 10 cities in the world with the number of super-rich people living in it.
The influx of super-rich investors caused a supply shortage in the super-luxury real estate segment, resulting in the fastest rise in prices in 2022 in this segment. More and more tourists and expats also prefer renting villas and townhouses rather than flats.
You can buy a property in Dubai in the primary or secondary market. According to statistics from the emirate's Land Department, secondary housing accounted for about 60% of all real estate transactions in 2022. Accurate data for the past year will be available at the end of January 2023.
What property to buy in the UAE in 2024?
Given the rapidly growing demand for real estate in Dubai, experts are expecting new home sales records in 2024. The question remains open, what type of real estate will be most in demand in the coming year?
Small residential properties in residential buildings in the central and coastal areas are in high demand amongst tenants. One can be sure that by 2024, investors will still benefit from buying apartments in development projects in Dubai in the new residential complexes in areas of the emirate e.g., Jumeirah, Downtown Dubai, Business Bay, and neighbouring ones.
At the recently held international exhibition Cityscape Global 2022, dedicated to urban development and real estate investment, UAE developers proposed projects to invest in family-oriented residential buildings. This is due to the large influx of Russian families to the UAE. The fact that families are increasingly moving to the UAE shows that villas and townhouses will soon become more in demand amongst investors. One should remember that, when renting houses, families are interested in social infrastructure and amenities, i.e., polyclinics, kindergartens, parks, and good schools nearby.
Areas in the new branded projects are rapidly becoming more expensive and are well-rented out. This is a luxury property entering the market under a well-known name (e.g., The Ritz Carlton). Many investors are willing to pay extra money for premium branded properties. They tend to become more expensive even many years after commissioning.
An important point to consider when comparing current real estate prices in the metropolis with 2014 data. We can see that the cost of apartments is 20% lower than 8 years ago, and only 6% for villas. Based on this, the villa market may soon begin to overheat, which is not true of the flats segment. So, in the long term, investments in flats in 2024 look more dependable than in villas.
In addition to Dubai’s leading residential property sales, investors are encouraged to look at properties in other emirates in 2024. Foreign interest also increased in 2022. Thus, Sharjah, the third-largest emirate in the UAE, made transactions for a record AED 1.9 billion in October. And the demand amongst Russian citizens for housing in Abu Dhabi in the third quarter of this year increased by 45% compared to the same period in 2021.
